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10 Aug 2018
U.S. Residential Mortgage Servicer Assessment Action
New York, August 10, 2018 -- Moody's Investors Service has upgraded the servicer quality (SQ) assessment
for JPMorgan Chase Bank, N.A.'s ("Chase")
as a primary servicer of subprime residential mortgage loans from SQ2-
to SQ2. We also affirmed Chase's servicer quality assessments
of SQ2 as a primary servicer of prime mortgage loans and SQ2+ as
a master servicer.
ASSESSMENT RATIONALE
The upgrade of Chase's subprime SQ assessment is mainly due to improvement
in its default metrics performance.
Moody's prime and subprime servicer assessment are based on Chase's
above average collection abilities, above average loss mitigation,
average foreclosure and REO timeline management, above average loan
administration and strong servicing stability.
We view Chase's collection abilities as above average. The
company continues to maintain solid call center metrics in its customer
service and collections units. Chase's collection performance
metrics were above average for the review period compared to peers.
During the review period Chase implemented a new collector scorecard and
eliminated collector incentives.
We assess Chase's loss mitigation abilities as above average.
The company's loss mitigation metrics are above average compared
with peers. Chase subprime modification performance is strong.
We view Chase's foreclosure and REO timeline management as average.
Chase improved its foreclosure and REO timelines compared to the prior
review. The company has a comprehensive pre-foreclosure
audit review process.
We assess Chase's loan administration function as above average.
The component assessment is based on solid payment processing, boarding
and document management practices. The company does not earn a
commission for force-placed insurance.
We view the company's servicing stability as strong. The long term
deposit rating of JPMorgan Chase Bank, N.A. is Aa2
under review for possible upgrade. As of December 31, 2017,
Chase's servicing portfolio consisted of approximately 4.2
million loans (excluding REO) with an unpaid principal balance of $772.6
billion. Chase maintains an experienced management team and a robust
technology infrastructure.
The master servicing assessment is based on strong reporting & remitting,
above average compliance and monitoring and above average servicing stability.
The company's cash remittance function is highly automated and the servicing
oversight team uses a comprehensive servicer scorecard to review primary
servicer performance.
The previous assessment action for Chase's prime and subprime SQ
assessment's occurred on August 16, 2016. At that time,
we affirmed Chase's assessment as a primary servicer of prime loans
at SQ2 and the subprime servicer assessment at SQ2-. The
previous assessment action for Chase's master servicing assessment
was on March 1, 2016 and we affirmed the company's assessment of
SQ2+.
Moody's SQ assessments represent its view of a servicer's ability to prevent
or mitigate asset pool losses across changing markets. The assessment
scale ranges from SQ1 (strong) to SQ5 (weak). Where appropriate,
a "+" or "-" modifier will be appended to the relevant assessment
to indicate a servicer's relative servicing quality within a particular
category.
The principal methodology used in this analysis was "Servicer Quality
Assessments for Servicers of Residential Mortgages" published in May 2017.
Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
This publication does not announce a credit rating action. For
any credit ratings referenced in this publication, please see the
ratings tab on the issuer/entity page on www.moodys.com
for the most updated credit rating action information and rating history.
Francis Wissman
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
William Fricke
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
No Related Data.
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